I’ve noticed an increasing number of price reductions recently. This is a bit unexpected in our long-running “seller’s market,” so I did a little research on Denver’s MLS, REcolorado.com.
I couldn’t study the whole metro area, so I studied the non-builder listings in a middle market city, Lakewood, and performed an in-depth analysis of this summer’s sales activity. Here’s what I found.
Limiting my analysis to non-builder listings, there are 255 active listings in Lakewood. Over half of them, 185, have been on the market 10 days or longer, more than half of which (109) have reduced their listing prices. Median days on market for all those active listings is 24 versus 11 days for the 232 Lakewood listings that are under contract.
Next I analyzed the 772 closings since June 15th of non-builder listings in Lakewood, 293 of which (40%) were on the market 10 days or longer, 100 of those (13%) on the market over 30 days. Forty-two percent of the listings sold for less than full price.
I looked at how those statistics compared with last summer. During the same period in 2017, there were 741 non-builder Lakewood homes sold, 36% of which were on the market over 10 days, compared to 40% this summer, not much better than this summer. Also, median days on market last summer was the same as this summer — 6 days. But only 27% of last summer’s listings sold for less than their initial asking price, vs. 42% this summer.
Let’s look at the metro area as a whole now. While I can’t drill down like I did in my Lakewood analysis, I can run some useful statistical reports on REcolorado.com like the chart at right, which compares this summer with last summer in terms of the ratio of closed price to listing price and median days on market.
As you can see above, each month this summer saw homes selling for less of a premium and taking longer to sell than last summer. Given the statistics of the current active listings in my Lakewood sample, it’s clear that the statistics this fall and winter will keep going in the direction demonstrated above — and perhaps more dramatically.
If your home is active now or if you are planning to put it on the market soon, you should pay attention to this trend and act appropriately, but what does that look like?
First and foremost, as I wrote last week, it means you should price your home based on past sales and no higher. If you price your home above current comparable sales, you’re likely going to watch it sit on the market and face lowering the price later on. That would completely rule out the possibility of attracting multiple offers, which is where sellers get all their leverage in bidding up their sale price. And remember that it’s impossible to underprice a home, because that only draws those multiple offers which, with a strong negotiator on your side, can result in the highest possible price for your home.
Secondly, you need to present your home in the most appealing light possible through thoughtful staging, magazine-quality (HDR) photos, a compelling narrated video tour of your home on YouTube, and taking full advantage of all the MLS fields, including measurements of each room and descriptions of each room’s features — all things which Golden Real Estate does for its listings.
Thirdly, you need to maximize the exposure of your home — another of Golden Real Estate’s key strengths. Putting it on the MLS is a start, but we also create a listing website, as you see in all promotions of our listings.